Ancient Rome and tax farming: In the provinces of Ancient Rome (Republic Era), think Gaul, Hispania, Israel etc., wealthy individuals, known as ‘Publicani’, would competitively bid and pre-pay the ‘taxes’ for a specific region in coinage. This gave the Roman Treasury a guaranteed income but as pre-payment it was a legal loan which generated interest.
The Publicani then collected, or hired collectors for, that region’s taxes in coin and barter. He had the responsibility/choice for converting the barter into coin after collection or storing the same. These tax collectors were notorious and hated about under-valuing the barter and overstating the tax burden. They did have the Roman Army and Judiciary at their back for the collections and had the most recent census to guide their commerce raids.
There was always a scandal going on in this process and some feuding families would push the bids high to force a rival to go broke in trying to collect, which, of course, was bad news for the actual tax payers. Before he became an Apostle, Saint Matthew was just that unpopular guy, sitting at a table with a couple of strong-arms, collecting too high taxes!
Guide for today? If it isn’t a tax, then it is not subject to a vote nor can you vote OUT the politician. A franchise fee is only controlled by a franchising commission which is generally appointed, not elected. The further a cost is displaced from the payer, the harder it is to dispute and clearly review. Politicians love it for just that reason!
Thank you for your comment. Prop. 13 set a 1% base tax limit to property taxes. The California Public Utilities Commission sets a 1% franchise fee for general law cities. A voter initiative could also limit franchise taxes to 1%, instead of an upfront multimillion dollar payment plus 3% of gross revenues per year.